##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: June 26, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 000-03905
 TRANSCAT, INC.
  Ohio
    
    16-0874418(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 35 Vantage Point Drive, Rochester, New York
    
    14624(Address of principal executive offices)
    
    (Zip Code)
 (585) 352-7777
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer
o
    
    Non-accelerated filer o(Do not check if a smaller reporting
company)
    
    Smaller reporting company
þ
 o þ




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##### 



Page(s)PART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Consolidated Financial Statements:Statements of Operations and Comprehensive Income (Loss) for the First Quarter Ended June 26, 2010 and June 27, 2009
    
    
    3Balance Sheets as of June 26, 2010 and March 27, 2010
    
    
    4Statements of Cash Flows for the First Quarter Ended June 26, 2010 and June 27, 2009
    
    
    5Statements of Shareholders Equity for the First Quarter Ended June 26, 2010
    
    
    6Notes to Consolidated Financial Statements
    
    
    7-11Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12-18Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    18Item 4.
    
    Controls and Procedures
    
    
    18-19PART II.
    
    OTHER INFORMATIONItem 6.
    
    Exhibits
    
    
    19SIGNATURES
    
    
    20INDEX TO EXHIBITS
    
    
    21EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
 TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
 (Unaudited)First Quarter EndedJune 26,
    
    
    June 27,2010
    
    
    2009Product Sales
    
    $
    12,975
    
    
    $
    11,268Service Revenue
    
    
    7,653
    
    
    
    5,940Net Revenue
    
    
    20,628
    
    
    
    17,208Cost of Products Sold
    
    
    9,474
    
    
    
    8,620Cost of Services Sold
    
    
    5,796
    
    
    
    4,703Total Cost of Products and Services Sold
    
    
    15,270
    
    
    
    13,323Gross Profit
    
    
    5,358
    
    
    
    3,885Selling, Marketing and Warehouse Expenses
    
    
    3,049
    
    
    
    2,539Administrative Expenses
    
    
    1,858
    
    
    
    1,462Total Operating Expenses
    
    
    4,907
    
    
    
    4,001Operating Income (Loss)
    
    
    451
    
    
    
    (116
    )Interest Expense
    
    
    12
    
    
    
    14Other (Income) Expense, net
    
    
    (5
    )
    
    
    15Total Other Expense
    
    
    7
    
    
    
    29Income (Loss) Before Income Taxes
    
    
    444
    
    
    
    (145
    )Provision for (Benefit from) Income Taxes
    
    
    166
    
    
    
    (56
    )Net Income (Loss)
    
    
    278
    
    
    
    (89
    )Other Comprehensive (Loss) Income
    
    
    (1
    )
    
    
    39Comprehensive Income (Loss)
    
    $
    277
    
    
    $
    (50
    )Basic Earnings (Loss) Per Share
    
    $
    0.04
    
    
    $
    (0.01
    )Average Shares Outstanding
    
    
    7,287
    
    
    
    7,388Diluted Earnings (Loss) Per Share
    
    $
    0.04
    
    
    $
    (0.01
    )Average Shares Outstanding
    
    
    7,527
    
    
    
    7,388
  3




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TRANSCAT, INC.  
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)June 26,
    
    
    March 27,2010
    
    
    2010ASSETSCurrent Assets:Cash
    
    $
    85
    
    
    $
    123Accounts Receivable, less allowance for doubtful accounts of $121
and $82 as of June 26, 2010 and March 27, 2010, respectively
    
    
    8,738
    
    
    
    11,439Other Receivables
    
    
    755
    
    
    
    418Inventory, net
    
    
    7,046
    
    
    
    5,906Prepaid Expenses and Other Current Assets
    
    
    780
    
    
    
    915Deferred Tax Asset
    
    
    637
    
    
    
    566Total Current Assets
    
    
    18,041
    
    
    
    19,367Property and Equipment, net
    
    
    4,013
    
    
    
    4,163Goodwill
    
    
    10,038
    
    
    
    10,038Intangible Assets, net
    
    
    1,181
    
    
    
    1,234Deferred Tax Asset
    
    
    474
    
    
    
    533Other Assets
    
    
    381
    
    
    
    378Total Assets
    
    $
    34,128
    
    
    $
    35,713LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Accounts Payable
    
    $
    7,559
    
    
    $
    8,798Accrued Compensation and Other Liabilities
    
    
    2,052
    
    
    
    3,171Income Taxes Payable
    
    
    109
    
    
    
    251Total Current Liabilities
    
    
    9,720
    
    
    
    12,220Long-Term Debt
    
    
    2,931
    
    
    
    2,532Other Liabilities
    
    
    742
    
    
    
    704Total Liabilities
    
    
    13,393
    
    
    
    15,456Shareholders Equity:Common Stock, par value $0.50 per share, 30,000,000 shares authorized;
7,709,108 and 7,698,450 shares issued as of June 26, 2010 and
March 27, 2010, respectively; 7,290,326 and 7,279,668 shares
outstanding as of June 26, 2010 and March 27, 2010, respectively
    
    
    3,855
    
    
    
    3,849Capital in Excess of Par Value
    
    
    9,552
    
    
    
    9,357Accumulated Other Comprehensive Income
    
    
    381
    
    
    
    382Retained Earnings
    
    
    8,582
    
    
    
    8,304Less: Treasury Stock, at cost, 418,782 shares as of
June 26, 2010 and March 27, 2010
    
    
    (1,635
    )
    
    
    (1,635
    )Total Shareholders Equity
    
    
    20,735
    
    
    
    20,257Total Liabilities and Shareholders Equity
    
    $
    34,128
    
    
    $
    35,713
  4




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TRANSCAT, INC.  
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)First Quarter EndedJune 26,
    
    
    June 27,2010
    
    
    2009Cash Flows from Operating Activities:Net Income (Loss)
    
    $
    278
    
    
    $
    (89
    )Adjustments to Reconcile Net Income (Loss) to Net Cash
(Used in) Provided by Operating Activities:Deferred Income Taxes
    
    
    (14
    )
    
    
    (80
    )Depreciation and Amortization
    
    
    496
    
    
    
    461Provision for Accounts Receivable and Inventory
Reserves
    
    
    1
    
    
    
    47Stock-Based Compensation Expense
    
    
    159
    
    
    
    187Changes in Assets and Liabilities:Accounts Receivable and Other Receivables
    
    
    2,359
    
    
    
    802Inventory
    
    
    (1,140
    )
    
    
    566Prepaid Expenses and Other Assets
    
    
    54
    
    
    
    (194
    )Accounts Payable
    
    
    (1,239
    )
    
    
    283Accrued Compensation and Other Liabilities
    
    
    (1,023
    )
    
    
    (219
    )Income Taxes Payable
    
    
    (142
    )
    
    
    (215
    )Net Cash (Used in) Provided by Operating Activities
    
    
    (211
    )
    
    
    1,549Cash Flows from Investing Activities:Purchase of Property and Equipment
    
    
    (215
    )
    
    
    (290
    )Net Cash Used in Investing Activities
    
    
    (215
    )
    
    
    (290
    )Cash Flows from Financing Activities:Revolving Line of Credit, net
    
    
    405
    
    
    
    (1,309
    )Payments on Other Debt Obligations
    
    
    (6
    )
    
    
    (6
    )Payment of Contingent Consideration
    
    
    (52
    )
    
    
    Issuance of Common Stock
    
    
    42
    
    
    
    33Net Cash Provided by (Used in) Financing Activities
    
    
    389
    
    
    
    (1,282
    )Effect of Exchange Rate Changes on Cash
    
    
    (1
    )
    
    
    8Net Decrease in Cash
    
    
    (38
    )
    
    
    (15
    )Cash at Beginning of Period
    
    
    123
    
    
    
    59Cash at End of Period
    
    $
    85
    
    
    $
    44Supplemental Disclosure of Cash Flow Activity:Cash paid during the period for:Interest
    
    $
    13
    
    
    $
    30Income Taxes, net
    
    $
    304
    
    
    $
    228
  5




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TRANSCAT, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 CapitalCommon Stock
    
    
    In
    
    
    Accumulated
    
    
    
    
    
    
    Treasury StockIssued
    
    
    Excess
    
    
    Other
    
    
    
    
    
    
    Outstanding$0.50 Par Value
    
    
    of Par
    
    
    Comprehensive
    
    
    Retained
    
    
    at CostShares
    
    
    Amount
    
    
    Value
    
    
    Income
    
    
    Earnings
    
    
    Shares
    
    
    Amount
    
    
    TotalBalance as of March 27, 2010
    
    
    7,698
    
    
    $
    3,849
    
    
    $
    9,357
    
    
    $
    382
    
    
    $
    8,304
    
    
    
    419
    
    
    $
    (1,635
    )
    
    $
    20,257Issuance of Common Stock
    
    
    8
    
    
    
    4
    
    
    
    38
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42Stock-Based Compensation
    
    
    
    
    
    
    
    
    
    
    137
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    137Restricted Stock
    
    
    3
    
    
    
    2
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22Comprehensive Income:Currency Translation
Adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )Unrecognized Prior Service
Cost, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    278
    
    
    
    
    
    
    
    
    
    
    
    278Balance as of June 26, 2010
    
    
    7,709
    
    
    $
    3,855
    
    
    $
    9,552
    
    
    $
    381
    
    
    $
    8,582
    
    
    
    419
    
    
    $
    (1,635
    )
    
    $
    20,735
  6




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TRANSCAT, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   NOTE 1  GENERAL
 Description of Business:
 Basis of Presentation:
 Fair Value of Financial Instruments:
 Stock-Based Compensation:
 Foreign Currency Translation and Transactions:
  7




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Earnings Per Share:
  First Quarter EndedJune 26,
    
    June 27,2010
    
    2009Average Shares Outstanding  Basic
    
    
    7,287
    
    
    
    7,388Effect of Dilutive Common Stock Equivalents (1)
    
    
    240
    
    
    
    Average Shares Outstanding  Diluted
    
    
    7,527
    
    
    
    7,388Anti-dilutive Common Stock Equivalents
    
    
    638
    
    
    
    666
 
 (1)
    
    Due to Transcats net loss in the first quarter of fiscal year 2010, 0.2
million shares of dilutive common stock equivalents were excluded from the
computation of diluted loss per share because their inclusion would be
anti-dilutive. Subsequent Events:
 Reclassification of Amounts:
 NOTE 2  DEBT
 Description.
 Interest and Commitment Fees. 1 2
 Covenants.
 Other Terms.
 NOTE 3  STOCK-BASED COMPENSATION
  8




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Restricted Stock:
  Stock Options:
  WeightedAverage
    
    
    Weighted AverageNumber
    
    
    Exercise
    
    
    Remaining
    
    
    AggregateOf
    
    
    Price Per
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Share
    
    
    Term (in years)
    
    
    ValueOutstanding as of March 27, 2010
    
    
    674
    
    
    $
    5.72Granted
    
    
    
    
    
    
    Exercised
    
    
    (2
    )
    
    
    2.61Cancelled/Forfeited
    
    
    
    
    
    
    Outstanding as of June 26, 2010
    
    
    672
    
    
    
    5.73
    
    
    
    6
    
    
    $
    1,113Exercisable as of June 26, 2010
    
    
    451
    
    
    
    4.91
    
    
    
    6
    
    
    
    1,074
   9




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Warrants:
 WeightedAverage
    
    
    Weighted AverageNumber
    
    
    Exercise
    
    
    Remaining
    
    
    AggregateOf
    
    
    Price Per
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Share
    
    
    Term
    
    
    ValueOutstanding as of March 27, 2010
    
    
    41
    
    
    $
    4.89Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Cancelled/Forfeited
    
    
    
    
    
    
    Outstanding as of June 26, 2010
    
    
    41
    
    
    
    4.89
    
    
    Less than 1 year
    
    
    $
    94Exercisable as of June 26, 2010
    
    
    41
    
    
    
    4.89
    
    
    Less than 1 year
    
    
    
    94
  NOTE 4  SEGMENT INFORMATION
  First Quarter EndedJune 26,
    
    
    June 27,2010
    
    
    2009Net Revenue:Product Sales
    
    $
    12,975
    
    
    $
    11,268Service Revenue
    
    
    7,653
    
    
    
    5,940Total
    
    
    20,628
    
    
    
    17,208Gross Profit:Product
    
    
    3,501
    
    
    
    2,648Service
    
    
    1,857
    
    
    
    1,237Total
    
    
    5,358
    
    
    
    3,885Operating Expenses:Product (1)
    
    
    2,875
    
    
    
    2,355Service (1)
    
    
    2,032
    
    
    
    1,646Total
    
    
    4,907
    
    
    
    4,001Operating Income (Loss)
    
    
    451
    
    
    
    (116
    )Unallocated Amounts:Total Other Expense, net
    
    
    7
    
    
    
    29Provision for (Benefit From)
Income Taxes
    
    
    166
    
    
    
    (56
    )Total
    
    
    173
    
    
    
    (27
    )Net Income (Loss)
    
    $
    278
    
    
    $
    (89
    )
 
 (1)
    
    Operating expense allocations between segments were based on actual amounts, a
percentage of revenues, headcount, and managements estimates. 10




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NOTE 5  ACQUISITIONS
   11




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking Statements.
 CRITICAL ACCOUNTING POLICIES AND ESTIMATES
 Accounts Receivable:
 Stock-Based Compensation.
   Revenue Recognition.
 12




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Reclassification of Amounts:
 RESULTS OF OPERATIONS
  (Unaudited)First Quarter EndedJune 26,
    
    June 27,2010
    
    2009Gross Profit Percentage:Product Gross Profit
    
    
    27.0
    %
    
    
    23.5
    %Service Gross Profit
    
    
    24.3
    %
    
    
    20.8
    %Total Gross Profit
    
    
    26.0
    %
    
    
    22.6
    %As a Percentage of Total Net Revenue:Product Sales
    
    
    62.9
    %
    
    
    65.5
    %Service Revenue
    
    
    37.1
    %
    
    
    34.5
    %Total Net Revenue
    
    
    100.0
    %
    
    
    100.0
    %Selling, Marketing and Warehouse Expenses
    
    
    14.8
    %
    
    
    14.8
    %Administrative Expenses
    
    
    9.0
    %
    
    
    8.5
    %Total Operating Expenses
    
    
    23.8
    %
    
    
    23.3
    %Operating Income (Loss)
    
    
    2.2
    %
    
    
    (0.7
    )%Interest Expense
    
    
    0.1
    %
    
    
    0.1
    %Total Other Expense, net
    
    
    0.0
    %
    
    
    0.1
    %Total Other Expense
    
    
    0.1
    %
    
    
    0.2
    %Income (Loss) Before Income Taxes
    
    
    2.1
    %
    
    
    (0.9
    )%Provision for (Benefit from) Income Taxes
    
    
    0.8
    %
    
    
    (0.3
    )%Net Income (Loss)
    
    
    1.3
    %
    
    
    (0.6
    )%
 13




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FIRST QUARTER ENDED JUNE 26, 2010 COMPARED TO FIRST QUARTER ENDED JUNE 27, 2009 (dollars in thousands):
 Revenue:
 First Quarter EndedJune 26,
    
    
    June 27,2010
    
    
    2009Net Revenue:Product Sales
    
    $
    12,975
    
    
    $
    11,268Service Revenue
    
    
    7,653
    
    
    
    5,940Total
    
    $
    20,628
    
    
    $
    17,208
   FY 2011
    
    
    FY 2010Q1
    
    
    Q4
    
    Q3
    
    Q2
    
    Q1Product Sales Growth (Decline)
    
    
    15.1
    %
    
    
    
    20.5
    %
    
    
    8.5
    %
    
    
    (7.6
    %)
    
    
    (8.5
    %)
  FY 2011
    
    
    FY 2010Q1
    
    
    Q4
    
    Q3
    
    Q2
    
    Q1Product Sales Per Business Day
    
    $
    203
    
    
    
    $
    230
    
    
    $
    249
    
    
    $
    190
    
    
    $
    176
  FY 2011
    
    
    FY 2010Q1
    
    
    Q4
    
    Q3
    
    Q2
    
    Q1Percent of Net Sales:Direct
    
    
    74.3
    %
    
    
    
    75.2
    %
    
    
    70.8
    %
    
    
    77.5
    %
    
    
    75.2
    %Reseller
    
    
    24.1
    %
    
    
    
    23.2
    %
    
    
    27.8
    %
    
    
    21.1
    %
    
    
    23.3
    %Freight Billed to Customer
    
    
    1.6
    %
    
    
    
    1.6
    %
    
    
    1.4
    %
    
    
    1.4
    %
    
    
    1.5
    %100.0
    %
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
  14




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FY 2011
    
    
    FY 2010Q1
    
    
    Q4
    
    Q3
    
    Q2
    
    Q1Total Pending Product Shipments
    
    $
    1,911
    
    
    
    $
    1,774
    
    
    $
    2,351
    
    
    $
    1,904
    
    
    $
    1,445% of Pending Product Shipments
that are Backorders
    
    
    78.6
    %
    
    
    
    90.6
    %
    
    
    82.8
    %
    
    
    78.9
    %
    
    
    72.2
    %
  FY 2011
    
    
    FY 2010Q1
    
    
    Q4
    
    Q3
    
    Q2
    
    Q1Service Revenue Growth
    
    
    28.8
    %
    
    
    
    30.6
    %
    
    
    10.7
    %
    
    
    15.5
    %
    
    
    7.2
    %
  FY 2011
    
    
    FY 2010Q1
    
    
    Q4
    
    Q3
    
    Q2
    
    Q1Percent of Service Revenue:Depot/Onsite
    
    
    74.4
    %
    
    
    
    75.9
    %
    
    
    73.5
    %
    
    
    77.3
    %
    
    
    79.3
    %Outsourced
    
    
    23.3
    %
    
    
    
    21.6
    %
    
    
    24.0
    %
    
    
    20.2
    %
    
    
    18.2
    %Freight Billed to Customers
    
    
    2.3
    %
    
    
    
    2.5
    %
    
    
    2.5
    %
    
    
    2.5
    %
    
    
    2.5
    %100.0
    %
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 Gross Profit:
 First Quarter EndedJune 26,
    
    
    June 27,2010
    
    
    2009Gross Profit:Product
    
    $
    3,501
    
    
    $
    2,648Service
    
    
    1,857
    
    
    
    1,237Total
    
    $
    5,358
    
    
    $
    3,885
   15




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##### Table of Contents



FY 2011
    
    
    FY 2010Q1
    
    
    Q4
    
    Q3
    
    Q2
    
    Q1Channel Gross Profit %  Direct (1)
    
    
    25.0
    %
    
    
    
    24.7
    %
    
    
    23.1
    %
    
    
    23.2
    %
    
    
    24.3
    %Channel Gross Profit %  Reseller (1)
    
    
    16.9
    %
    
    
    
    16.0
    %
    
    
    15.0
    %
    
    
    15.6
    %
    
    
    17.0
    %Channel Gross Profit %  Combined (2)
    
    
    23.0
    %
    
    
    
    22.6
    %
    
    
    20.8
    %
    
    
    21.6
    %
    
    
    22.6
    %Other Items % (3)
    
    
    4.0
    %
    
    
    
    3.1
    %
    
    
    1.2
    %
    
    
    0.7
    %
    
    
    0.9
    %Total Product Gross Profit %
    
    
    27.0
    %
    
    
    
    25.7
    %
    
    
    22.0
    %
    
    
    22.3
    %
    
    
    23.5
    %
 
 (1)
    
    Channel gross profit % is calculated as net sales less purchase costs divided by
net sales.(2)
    
    Represents aggregate gross profit % for direct and reseller channels, calculated as net
sales less purchase costs divided by net sales.(3)
    
    Includes vendor rebates, cooperative advertising income, freight billed to customers,
freight expenses, and direct shipping costs.  FY 2011
    
    
    FY 2010Q1
    
    
    Q4
    
    Q3
    
    Q2
    
    Q1Service Gross Profit Dollar Growth
    
    
    50.1
    %
    
    
    
    25.4
    %
    
    
    15.0
    %
    
    
    25.5
    %
    
    
    2.9
    %
 Operating Expenses:
 First Quarter EndedJune 26,
    
    
    June 27,2010
    
    
    2009Operating Expenses:Selling, Marketing and Warehouse
    
    $
    3,049
    
    
    $
    2,539Administrative
    
    
    1,858
    
    
    
    1,462Total
    
    $
    4,907
    
    
    $
    4,001
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##### Table of Contents



Taxes:
 First Quarter EndedJune 26,
    
    June 27,2010
    
    2009Provision for (Benefit from) Income Taxes
    
    $
    166
    
    
    $
    (56
    )
  LIQUIDITY AND CAPITAL RESOURCES
  Cash Flows .
 First Quarter EndedJune 26,
    
    June 27,2010
    
    2009Cash (Used in) Provided by:Operating Activities
    
    $
    (211
    )
    
    $
    1,549Investing Activities
    
    
    (215
    )
    
    
    (290
    )Financing Activities
    
    
    389
    
    
    
    (1,282
    )
 Operating Activities
 
    
    Inventory/Accounts Payable: Our inventory balance at June 26, 2010 was $7.0
million, an increase of $1.1 million when compared to $5.9 million on-hand on March 27,
2010. The increase was primarily due to our strategic decision to maintain higher
inventory levels of specific, higher-volume products, in support of greater sales
growth and in response to increased lead times from manufacturers. During
the first quarter of fiscal year 2010, we decreased inventory levels by $0.6 million in
response to recessionary economic conditions. In general, our accounts payable balance
increases or decreases with inventory levels. However, this correlation may vary at a
quarter-end due to the timing of vendor payments for inventory receipts and inventory
shipped directly to customers, as well as the timing of product sales.
    
    Receivables: We continue to maintain strong collections on our accounts receivable.
The following table illustrates our days sales outstanding for the fiscal quarters
ending in June 26, 2010 and June 27, 2009:
 June 26,
    
    June 27,2010
    
    2009Net Sales, for the last two fiscal months
    
    $
    14,732
    
    
    $
    12,394Accounts Receivable, net
    
    $
    8,738
    
    
    $
    8,116Days Sales Outstanding
    
    
    36
    
    
    
    39
 
    
    Accrued Compensation and Other Liabilities: During the first quarter of fiscal
year 2011, we used $1.0 million in cash to pay accrued compensation and other
liabilities compared with $0.2 million in the first quarter of fiscal year 2010. This
increase was primarily attributable to higher payments for employee profit sharing and
performance-based management bonuses.
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##### Table of Contents



Investing Activities
 Financing Activities
 OUTLOOK
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 INTEREST RATES
   FOREIGN CURRENCY
   
 ITEM 4. CONTROLS AND PROCEDURES
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures.
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##### Table of Contents



Changes in Internal Controls over Financial Reporting.
 
 PART II. OTHER INFORMATION
 
 ITEM 6. EXHIBITS
  19




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##### Table of Contents



SIGNATURES
  TRANSCAT, INC.Date: August 9, 2010
    
    /s/ Charles P. HadeedCharles P. HadeedPresident, Chief Executive Officer and Chief Operating Officer 
(Principal Executive Officer)Date: August 9, 2010
    
    /s/ John J. ZimmerJohn J. Zimmer
Vice President of Finance and Chief Financial Officer 
(Principal Financial Officer and Principal Accounting Officer)
 20




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##### Table of Contents



INDEX TO EXHIBITS
 (10)
    
    Material Contracts
 10.1
    
    Certain compensation information for Charles P. Hadeed,
President, Chief Executive Officer and Chief Operating Officer of the
Company is incorporated herein by reference from the Companys
Current Report on Form 8-K dated April 5, 2010.10.2
    
    Certain compensation information for John J. Zimmer, Vice
President of Finance and Chief Financial Officer of the
Company is incorporated herein by reference from the
Companys Current Report on Form 8-K dated May 20, 2010.
 (31)
    
    Rule 13a-14(a)/15d-14(a) Certifications
 31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 (32)
    
    Section 1350 Certifications
 32.1
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 21